the markets here. we have a setup for somewhat positive open about 40 basis points upside of the s&p 500. we got dow up 50 points right there. happy labor day. >> no, no. we're on tv at 3:00. tell people to tune in 3:00 p.m. eastern. >> i'm on tv at 3:00 every day. >> i am. tune in. >> thank you. good friday morning. welcome to "squawk on the street." i'm david faber with wilfred frost, we're live from post nine at the new york stock exchange. jim and carl have the morning off. futures as we get ready to wrap up the week, the month of august. kind of wrap up the summer. sorry to say that you can see that we are headed for a bit of a higher open. >> you're going to province next week. >> thank you for telling everybody. you know my travel plans. our road map, my summer is not over, but theirs may be. the fed's preferred inflation

indicator, 0.2% in july. that was as expected. we're going to discuss that with jeremy siegel who will join us. apple and nvidia reportedly in talks to invest in openai and would join microsoft and thrive capital in what is a significant funding round, value that company at over $100 billion. shares of dell are up in the premarket. the company seeing its ai server sales soar by some 80%. let's start with that market reaction to the pce as we head into the final trading session of the month. wilf, looked like it more or less came in, in line so to speak. >> absolutely in line why the market reaction is pretty muted. 2.5% year over year, the expectation was 2.5. the core fractionally better than expectation, 2.6% year over year. the forecast was 2.2%. i mean the bottom line of this is clearly that inflation is not going to be a factor that stops

the fed cutting at the next meeting in a couple weeks. a rate cut is coming, priced in. you could get a jobs number to alter the size of that next week. if it's weak, maybe 50 basis points. at least 25 seems priced in and you're not saying much market reaction from this. as you said, last trading day of the week, last trading day of the month as well. the only index that's down for both week and month is the nasdaq. the only index up for both week and month is the dow. the s&p splits off, which tells the story really of the last week and the last month. it will be interesting to see if there's much further action from here. just mentioned a little bit as well on the inflation front in eurozone numbers out of there as well. >> yep. >> also in line with expectations but a bigger improvement 2.2% coming in down from 2.6%. it was in line with expectations, but it's a three-year low, the print that you're seeing, eurozone as a whole, and the stock 600 europe hit a fresh intraday high during the session as well, so again

speaking to the pitch of that. germany and spain had bigger falls than expected. france had a tad hotter number than expected by 2.2%. what you're seeing there is all of the data that ecb needs to see to cut. they cut already. they're at 3.5%, their rate. >> right. >> bank of england has cut. the theme with the pce data coming in and what we expect from the fed is pretty much developed market. apart from japan which is going the opposite direction as we all know. >> yep. >> it's certainly a very big change of tone to where we were a couple months ago with all these people cutting. the one thing i think is interesting is what happens not so much in the next couple months, because clearly cuts are coming, but is by the end of the year, do we start to see inflation pick up again, which some have forecast, and too little balancing data points on that, from the european data, the services side rose to 4.2% year on year, last month was 4%. so even though the headline is looking good, they're almost

certain to cut in a couple weeks time once again. it's the one factor you've got to look out for, and i wonder about the same thing with the fed. pce is good. they're going to cut in a couple weeks time. perhaps 50 basis points if the jobs number is terrible. will they get all 400 worth of cuts done by the end of the year. we will see. >> we will indeed. elsewhere in the report we had personal income up 0.3%. i think it was 0.2% estimate and consumer spending up 0.5%, that was in line as well. >> by the way, i've always thought faber, frost and company has a great ring. >> you like that. >> we can try it out. >> we are trying it out. >> can we rename the show today as well. >> sure. you go ahead and do what you want. you are here. we're very thank. for you making the trip. >> i didn't know if they would put me in carl or jim's seat. i'm in jim's seat. >> you can do your best if you want. >> it means i have to start a friday by giving you a bit of grief for not wearing a necktie. >> i don't wear neckties on friday, wilf. >> yeah.

>> back when you were here i started that trend. >> you did start that trend. >> i know. makes me feel really old, actually, that i'm with jim's camp on that and still wear a necktie on friday. >> i like that about you. so many things. but you shouldn't feel old, believe me. >> well. >> you're a young man. >> anyway, it's great to be here. good fun. we're going to continue this conversation and bring in wharton school professor of finance jeremy siegel. great to see you. >> happy to see you. i'm orlandlder than both of you always wear a necktie. i guess it's the old generation. i don't know. >> well, you're older and wiser and that's why we're looking forward to hearing your perspective on all this. bottom line on the pce data are we going to see a rate cut and is it almost certainly going to be 25 basis points? >> well, i think whether it's 25 or more, really, as you mentioned, depends on what we see next friday, and there's even, you know, some more reports coming before that

september 18, so, you know, it's definitely going to be a cut. i think it's open between 25 and 50. i think it's interesting, wilfred, you're mentioning what's going on in the eurozone, lower, they have a different method of computing the housing, and i, you know, have been on the fed so long saying their housing measures lagged so much that it keeps on feeding in even, even though, you know, we have rental prices that have stabilized. they don't have that problem in europe and that's one reason i think it's further down. when i actually put, you know, on the ground housing prices and i actually get 2% or even below on year over year inflation, i think the fed is there, and, you know, i think, you know, to stay at 5.33, well they are going to go down, but, you know, my feeling is they should move much faster towards what they say is the neutral rate. now in that june meeting they say it was 2.8%. we're going to get a new read,

new dot plot in two and a half weeks. it may do up to 3, but that's still a -- you know, over 200 basis points lower than where it is today. >> are you saying that, prose fesser siegel, because you think, in fact, the inflation numbers give it the room to do so, so they may as well do so? or is it because the economy is also weakening at a faster pace than they are perhaps appreciating? >> i am worried. certainly, you know, i got worried with the last report, and it looked like those claims were heading way up. i get worried when they go above 240. they've stabilized down on 230. you know, we shouldn't get too excited. we saw that 3% print, you know, but that was april, may, june, where, you know, we're just on the verbge of september. i was disturbed the trade report yesterday didn't get a lot of, you know, press because it was, you know, over taken by

everything else, but the fed, the atlanta fed and several others, are going to come out with a report later today, believe it or not i think this quarter might have a one handle on gdp. so, yeah, now that's not recession, and i'm not saying recession, but it is a slowdown, and i think that, you know, given that slowdown, given that unemployment rate rose 4.3%, that is above the fed's long-term target, given where we're within one half percent on their own measure of their inflation target, my feeling is they should be closer to what they say is the neutral rate, rather than tip toe down, you know, quarter point here and there, we'll get there eventually. why take that risk? you know, be bolder. they were 75 basis points on the way up. for sure they will be too late,

and i'm not saying they should panic, but, you know, lower i think is the better action. >> although you have a lot of attention not that long ago when on our air talking for an emergency rate cut. >> i did. >> oh, my god, what? you seem to have backed off from that. what was it you were seeing then that you aren't seeing now? >> well, what i did see was the labor market and, as i said, the claims report going considerably up and said oh, i saw the sahm rule being triggered, a number of other rules being triggered, and then i said to myself, well, you know, why is the fed at 5.3 when they say it should be at 2.8 when it's long term. now, again, i will absolutely admit things called down. the economy looks good. but, you know, let's put -- even if the gdp is at 2%, which is, you know, let's say the long term target, that doesn't argue to stay at 5.3, when you're that

close to target. some people are saying, oh, the economy is fine. leave it where it is. that's not the logic of the fed. that's not what they say. unless they really think the fed funds rate should be 4.5 to 5, so they can tip toe down. i don't hear that from anyone, so my feeling is i'm not quite sure why being so close, 80 to 100% there, on unemployment, over 100% there, they are tiptoeing down so slowly on fed funds. >> tell us what this all does for your view on the s&p 500? if we've got 100 basis points priced in by the end of the year, probably not going to get more than that -- >> yeah. >> with that in mind, do we also have to see the economy land softly? if it worsens, will rate cuts do enough to prop up the s&p 500? or do you kind of need a bit of both with where we are at the

moment? >> well, as you know, you know, the long bond is saying the fed is going to be more aggressive than a lot of people think, and probably even than the dot plot. if you look forward to the june of next year, you see quite a number of cuts. in some ways, the bond market is doing the fed's job for them, bringing down that mortgage rate, which is due to the 10-year. however, we should remember that a lot of small firms as well as individuals, you know, they don't finance at the 10-year if you're not buying a house. they finance at the prime rate, what used to be call the libor rate, short firms finance at that short-term rate. that's one reason why small firms have been hurt so much more than the large firms by the rise in interest rates because they are much more short-term oriented. that lowering of rate would help

those smaller firms and would help the dividend paying firms. i think both -- i think a lowering of rates aggressively is really needed to turn that scenario around. >> yeah. so does that mean you want to stay away from sort of the megacap part of the market, so to speak, and kind of lean in to this broadening theme we talk so often about? >> well, i mean, i would -- i would -- i certainly think there's a reason for that, and i like those relative valuations. i just don't want the fed to go down too slow, so if the data looks weak and they only go down 25 basis points then i get more worried. slow down to maybe zero to 1% for two or three quarters, got to be negative for recession, actually even a little bit than that, two quarters a couple years ago we had negative and didn't call it because the unemployment rate didn't go up, but now we have the unemployment rate. i'm not calling a recession. i'm saying the fed, if it goes

down too slow, is taking a risk that i don't think it has to take. >> professor siegel, thanks so much for joining us. great to see you. >> absolutely. have a good labor day, guys. >> we are expected 0.3% on the s&p as things stand. the nasdaq, by the way, if it opens up 0.7 would put it in positive territory again for the month. >> yeah. well, components of that that reported earnings that we're keeping an eye on include dell, marvel as well. dell up in the premarket after a lift in full-year guidance, posted quarterly results above consensus. server and networking revenue, said this earlier, up as much as 80%. demand growth across ai, traditional servers. marvel raises guidance as well as having a beat, at least of what analysts had anticipated due to what it's calling ai demand. that stock, by the way, is amongst the biggest premarket gainers on the nasdaq at this point. dell is to a certain extent the second tier of ai bellwether at this point, wilfred.

and they did have operating income 1.3 billion. nongap operating income 2 billion up 15%, 3% year over year and diluted earnings of 1.17. i'll get to that later on mongo because the differential, i like to focus on that sometimes, nongap and gap is enormous at some of these companiesedy different stock based com. back to dell, you can see being responded to at least in the premarket, we get started trading 16 minutes from now, positively. >> 80% revenue growth in the ai related server growth. as you're saying for a second derivative part of this boom it's quite striking the pace of growth there. they weren't yet seeing a rebound in some of their other traditional hardware, the more traditional servers and pcs but we're optimistic about the pc upgrade cycle to come. we'll see if that materializes. it's a promise that never quite materializes. >> the idea that ai-related

components and/or whatever you want to call it in terms of the ability of the pc to sort of respond in ways it doesn't currently that people believe will drive an upgrade cycle. >> the two other little things that stood out for me in this, clearly this is a hardware company. it's not like there's a debate in the way that we've been having this week with nvidia that it's sort of hardware, but with such innovation protecting it software bolted on. they did guide down the margin. with such an ai exposed theme they guided it down by 810 bob pisani. it is a different type of product. if you do want exposure to ai, this is a cheap stock. i mean this is nothing compared to with what you see from marvel which had a strong beat as you said, high 40s, more expensive than nvidia nor next year. morgan stanley noted 146 to dell -- >> fairly can be a low margin business. >> of course. >> high multiple -- >> of course. >> nvidia operating mar gyps

pretty nice. ai momentum accelerated in the second quarter and increase in the number of enterprise customers buying ai solutions each quarter from jeff clark who runs dell technologies. coming up, we'll have more. we got a lot of movers by the way. we'll be talking apple and nvidia, at least some reports have them investing as well in openai. "squawk on the street" will be right back. is it me... or is work not working? at least, not the way it could work. your people are buried in busy work. and you might be thinking... can ai make it all work? it can. on the servicenow platform, ai transforms your entire business. your people work better, your customers are happier, and todd... well... he's practically euphoric. practically. so, let's get to work. (♪♪)

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pair of tech titans in the ai spotlight this morning. "the wall street journal" reporting apple and nvidia both in talks to invest in openai. they, of course, would join microsoft and thrive capital as well. part of a new fundraising round. it would value the chatgpt company at above $100 billion. of course we had deirdre with us yesterday discussing this as well. such an interesting company given its profit and nonprofit arm.

a lot of further questions around it to a certain extent. nobody questions at least chatgpt, and its importance and if you do get an apple in there or an nvidia, that's just another layer of, obviously, incredibly important companies that are at least in some way tied into the ecosystem in the future of this company. >> i always find it funny with the private investment rounds what we're seeing when it's $100 million. we need to know the details more so than ever with this company as we know with the microsoft round it's an exposure to their future profits as opposed to a formal stake in the company. clearly it's on the up. microsoft would be above water based on their investment round one way or another. what i think is really interesting here is whether any other ai developer will be looking at it and see this is a blow because it probably means apple is more committed than ever to using openai as its pro provider for all things going

forward. >> that would be important and give it prominence in what has become a more crowded field since the introduction of chatgpt in late 2022. >> exactly. i think it's more of a sort of long-term -- nvidia has been doing other sorts of investments of this kind and throwing it out there more, so it doesn't necessarily mean an exclusivity part of that. the other point, openai is one of the biggest buyers of nvidia chips and there's this sort of love in here of everyone doubling down on the same thing. this, as we've talked about before, not like these companies are about to run out of money in any way. it's not a question mark it's over leveraged in terms of the demand in this space. but there is a -- if you were kind of about to buy or if this was a public round inviting other investors to take part, you would think, well, there's quite a lot of insiders in this part. you give me money, i'll be the customer here and you reinvest in my company. i say that with the valuations are kind of hard to sort of go

by. when an ipo it's one day fine. >> if it actually -- >> exactly. >> given the profit-nonprofit sort of nature of the very unique organizational structure. >> yeah. >> of the company. that remains i think unclear. but to your point, a lot of the money that they raise is actually used on compute power that they spend with microsoft. >> right. so that's my point. i did not articulate it well. this is the last private round before it's about to ipo and the bank was oh, it was $100 billion and now ipo 150. you have to take that with a massive pinch of salt. everyone is a customer and partner and investing in each other. i don't think you can take those valuation multiples in any kind of true sense. >> we've got a lot coming up and a closer look at one of this month's top performing sectors, whether there is still time to invest in that sector. a lot of earnings to get to, whether it's lululemon or ulta or mongo, auto desk, wre gnge'oi to cover them all when we come back. ca. millions of americans who

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following some decent numbers from some of its rivals over the last couple days. up 6.5%. auto desk up 3.9. nvidia having a decent bounce, up 1.6%. it ended up closing down sharply having held up all right during most of the morning's trade down 6 or 7% by the close. the nasdaq itself expected to open up by 0.8%. all three are higher in the open. we'll be back in a couple minutes.

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welcome back. been an interesting month of august as we wrap up the trading day and get started about a minute from now. wilf, we've seen, you know, we're going to end potentially the month up on the broader markets with the s&p gaining as much as 1% again. we'll see how the session goes today. yet, remember the jobs report we got some time -- when we got that jobs report and suddenly everybody talking about the potential for recession. we had professor siegel on, i can remember that time, when he was like whoa, we need an intermeeting cut. the market was swooning. we've come back strongly. >> the first few days of august

certainly didn't end up representing the rest of the month. it is interesting as well to see what has led to the bounceback. clearly the likes of nvidia have bounced back very strongly, but are still below their lows, where other sectors that have come back to all-time highs. a breadth in the bounceback. everything has benefitted in the latter weeks of the month. >> there was the opening bell, of course. you can take a look at the real-time exchange back at our headquarters. at the big board, juliette celebrating on broadway, at the nasdaq, the first etf investing in private equity. kind of interesting. all right. not sure where we want to start but we have any number of earnings movers both up and down, whether it's lululemon up, ulta down, mongo up, dell up as well, autodesk. >> intel is at the top of the

s&p as it settles down. 5.8%. a story they might spin off parts. bouncing off the strong peer results we have been talking about with nvidia and marvell. intel have been slammed of late. >> intel, one of the worst performers for the month and the year. i mean there's a lot of questions there about just in general sort of the future of the company or at least the near term, and by that i mean, years to come in terms of which it's trying to work its way into a more profitable, so to speak, longer term position. there is -- there are some stories about, you know, hiring bankers. we were reporting here at cnbc. what that might actually mean for the company in terms of any roux review it might do. i find the talk of activist in intel in the sense of it's not clear to me why an activist would get involved. typically you want toat least have some sort of underlying feeling there is positive momentum, regardless of what you

may do and/or at least that the prospects for the company are such that, yes, there are things that can be done, to seize on opportunity. intel is such a long turnaround, wilf, it's not clear to me an activist would get involved. there is reporting that they are at least thinking about activism defense. >> it's been a long turnaround for a long time already as well. it's second highest on the s&p. top is autodesk, 5% gain, which we'll come to in just a moment. otherwise there's a lot of beneficiaries to the two key earnings reports we talked about a little bit earlier. quite a lot of semi names up there, nxp, broadcom as well, on semiconductor corporation as well, all of those names up 2, 3% off the back of marvell's numbers. we'll come to the nasdaq in a moment. you have hp up there at 2.5%. dell is not in the s&p 500 so we're not seeing that on the particular list of names.

nasdaq does lead the charge with the tech-led bounceback that we were talking about earlier. the nasdaq is higher by about a percent, just shy of that. the dow up 0.3%. the s&p up 0.5%. looks like it's going to be a positive day to end the week and month. the bottom of the pile of the s&p, ulta beauty down 5%. >> yeah. want to get to all of these. let's hit ulta since you mentioned it. we were encouraged by many positive indicators across our business but our second quarter performance did not meet our expectations. that's a quote at the beginning of the press release. the earnings press release driven by decline in store sales, the ceo going on to say we're clear about the factors that adversary impacted our store performance and we have actions under way to address the trends. about a 5% loss. want to take a longer term look as well at ulta in terms of its performance. net sales were up 0.9%, 2.6 billion, but that's largely new store contribution.

same-store sales actually for stores opened at least 14 months typically often the case are down 1.2%. so is that a reflection of the consumer as well? it's certainly a question. their willingness to sort of spend. >> on the consumer i do think the story of the week, which i know you and jim discussed yesterday, but it's worth touching on again, is dollar general and what we heard from the -- got slammed yesterday near the top of the s&p 500 today. a small bounceback in terms of its move yesterday. to reiterate what the ceo said on the earnings call the majority of their customers, quote, feel worse off financially than they were six months ago, as higher prices, and ceased borrowing costs have negatively impacted lower end consumers. what i think is striking about that is the timeframe. worse off than six months in a period of time when inflation readings have been improving and i think it will be interesting to see whether it broadens out, if it's just dollar general, broadens out into other consumer

cohorts and whether they actually benefit or not when rates come down or if this is an inflation factor. we're not going to see prices fall, we might see inflation moderate. it will be interesting to see if that broadens out. dollar general bouncing a bit. >> want to get to lululemon. your old anchor partner and my current one sara was here, i'm sure we would have led with it. >> and the fact that nike is one of the few decliners on the dow. >> yeah. lululemon i think being responded to fairly positively despite what you're looking at there. let's take a look at the stock itself this morning. no. it is down 1%. i had it up early in the premarket. we're talking about a quarter compared to -- net revenue up 7% to $2.4 billion. about 8% on a constant dollar basis. international up 29%. there have been -- you can see what's been going on with the

stock price over some period of time now, what had been, of course, for a long period of time a high flyer benefitting' nor mussily from the fashion trends it introduced. >> yeah. if we can get the intraday, it did start higher. >> it was higher this morning. >> it's telling you, all not just in the premarket at the open itself, so we've seen quite an interesting turnaround in the last couple of moments there. it was a couple percent the higher at the open and now a little bit lower. as we mentioned nike is one of the few dow decliners as well. maybe that's slightly in sympathy. again, coming back to that point for the week, and for the month as a whole, the dow has been doing pretty well over the course. >> i wanted to come to mongodb. we saw those shares leading in part the nasdaq. total revenue 478 million for the second quarter, up 13% year over year. subscription revenue 13% increase and clearly being

responded to positively in the marketplace by investors. i do you know, oftentimes look at the difference between gap and non-gap, wilf, because in some companies it's very small and others it is quite large. here it is notable. will it matter at any point? that remains very much unclear. these companies are based on their adjusted numbers, on free cash flow to a large extent, but stock-based compensation is often the biggest key in terms of the size of the variance between gap and non-gap. here you're talking about a company that would have lost 74 cents a share in terms of gap, but, obviously, made 50 -- let's see, sorry. i'm just making sure i have the numbers here. 70 cents a share, excuse me, on non-gap. that's always interesting. both of these gentlemen are

going to be guests on "money movers" so we can ask about that. you know, does stock-based comp become an issue for companies is a question that any number of investors have had over time. if you go through a difficult period, in which -- in which you can no longer be paying in your stock because, perhaps, it's only going straight down or for any number of other reasons and you actually have to replace it with cash, that, obviously, would impact profitability in a significant way. we have seen that before. i do remember it in the early off. certainly happening with so many of the names in what had been the high flying tech sector. that said the stock is responding very positively to, again, numbers that were above what had been anticipated >> big jump. 17% as you said. and as you mentioned, the ceo will be joining us a little bit later. as will the autodesk ceo who will be -- have an equally big smile on his face, autodesk near the top of the -- >> autodesk as well you have an activist. we were talking about i think

what may likely not be activism in intel, but we'll see. you do have jeff smith there of starboard. most recently putting a press release out on the 22nd of august saying or at least criticizing the board saying there's an urgent need for significant change at the company citing what he says is at least under performance, poor financial results and troubling disclosure and governance practices. and then he was seizing on recent public reports the lengths of autodesk went to -- shareholders. strong words a little over a week ago from jeff smith at starboard. having a fairly strong response to its quarter. >> second biggest gainer only behind intel which is up just over 5%. crowdstrike having a decent session up 3.7% so far and absolululu has turned around about 4% or so of a swing in the first moments of trade now down almost 3%.

worth having a quick check in on marvell and dell both of which we talked about before the open with their results overnight. dell tis up about 3 or 4% in th premarket. marvell paired back its gains. it had been up 10 to 11% in the premarket, now up 6 or 7, dell up 2.2%. itself pairing back some of those premarket gains, david. the market as a whole, looking pretty good where we stand up 0.6% on the s&p. the dow up 0.3. the nasdaq pushing to nearly 1% of gains. >> yeah. we can end here on alibaba as i work through my various pieces of paper. they end with what they conducted a review over a long period of time. where is that? i'm not going to find it. but the stock is up. you can see. you want to help me here >> get involved with your notes. >> i got lots of stuff here and

can't find the darn thing. alibaba has not been a great performer for some period of time. it's a long time ago that i can remember that ipo, jack ma sitting right here. those were interesting times. >> what year was that? 2016? >> was it '15. >> yeah. then i went over there and interviewed him. the chinese consumer, of course, has been the key here, and really what has been the emergence of significant competition in the domestic market in china, whether it is pinduoduo or we saw what happened to that stock earlier this week after they said they had to continue to invest a lot in their temu service which has helped drive a lot of that, tencent or any number of companies that presented significant competition to baba it is far lower than its highs and, in fact, i think if we go back to the ipo i would be curious to see, there's pdd, on

baba, judging that as you know, i'm having some technology issues this morning so i'm not capable of bringing that up on my own. >> it's funny when you snapshot back to the ipo on company specifics aside, the overall headwinds for that company are vastly different. >> yeah. >> to back then. the demographics pretty unattractive in china. the argument of a growing kind of gdp per capita in a consumer that can move up the value chain and a political point. you went over to interview him and wouldn't be able to do that now. >> i wouldn't. we did a number of interviews, jack ma. you can see the stock is actually down since its ipo right here and it was 2014. this time of year i do remember it. i'll never forget the hundreds of chinese journalists that were outside the exchange. i don't think i've ever seen the floor quite as electric as it was on that day given day. >> more so than -- >> masa son over there, jack ma here, the titans of the un underwriting banks here as well.

>> more electric than the debut of faber, frost and company? >> i'm not sure how this -- i think it might have been a little. >> just a little bit more people here. >> just a tad. over to bob pisani now. it's funny, bob, speaking of ipos, you want to get to the general market, this year we're working through this year and still not seeing this tidal wave of ipos i certainly would have anticipated that we would see more activity given the market itself. >> you know, i am baffled by the lack of activity because the market is at new highs. the overall market is in good shape. yields are trending down and theoretically it should be a great time. i hear a lot of hesitancy because the elections are coming up. what kind of endless number of excuses you are going to have. we'll talk about the ipo market a little bit more next week. i want to get to what we're doing right now. we're ending august in the same vain as we had in the last few weeks, which is broadening of the market. three to one advancing to declining stocks.

that's the big story. many, many more stocks advancing than declining and tech is basically flat. so take a look today at the markets. most of the sectors are all on the upside. tech is leading a little bit today. but consumer discretionary has been strong. starbucks and mcdonald's and gm have had a great month after lagging for so long. real estate is having great month and industrials good, financials having a great month. this broadening of the markets theme there's a lot of ways to slice and dice it. the s&p advance-decline line at a new high. that tells you many stocks advancing here. about two-thirds of the s&p is up this month here. if you look at the major indexes we've known for days now the equal weight s&p 500 is outperforming the overall s&p 500. the nasdaq is basically flat. the russell 2000 dropped 12% in the first couple days of august, and it never recovered, bulls i -- but it's been doing better recently. the sectors, how much the sectors are broadening out.

tech is basically flat on the month here. you see staples and real estate and health care and utilities all significantly outperforming. these are just different ways to slice and dice the broadening out of the market story. if you look at megacap tech, just call it a lackluster august. not a bad august. just a lackluster august. look at the movement here. so here's your major indices equal weight and s&p and the russell 2000. look at megacap tech here with apple just up and most everything else in the megacap area like microsoft, nvidia, alphabet and meta, all not doing much at all. on the earnings front nvidia has put the s&p 500 earnings over the top here. we've had a terrific second quarter. up 13%. we started the second quarter 9 or 10% expectations. now 13. nvidia helped that when it finally got over. we're basically done with the second quarter. look at the rest of the year. q3 and q4 strong. we're going to do 10% earnings growth this year. the estimate rps 15%.

this is why the stock market keeps holding up overall. you see generally good earnings numbers and decent economic numbers. so people ask me whether we're too bullish. i would say sentiment is on the bullish side but not wildly so. the weekly numbers here the important thing we're seeing some bullishness, but not i would say overly enthusiastic or not overly effusive here. bottom line we got a weak september and october but the numbers are on the side of the bulls. back to you. >> bob pisani as always, thank you so much. we've got some data crossing chicago pmi. let's get to rick santelli. >> thanks, wilf. chicago pmi for the month of august expected to be a bit under 45. it comes min much better than expected, 46.1. not only sequentially higher than the 45.3 in the rearview mirror but the best level since june and the second best level of the year. we all know that the last batch of numbers was mostly as

expected on the inflationary front. solid income and spending. we see that yields, well, yields are down on the week by one basis point on the two-year as we sit at 3.91. look at 3.86 in the 10, that's up 7 basis points on the week. the curves had some movement last week, of course, we were hovering around minus 10, minus 11. we've shaved that basically in half. "squawk on the street" will return after a very short break. (in atrocious french) au revoir mon amour. a bientot let's work on that french, shall we? (♪♪)

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a home router should never be a home wrecker. oo this is a good book title. the ai boom fueling a big race for cooling technology certainly when it comes to data centers. pippa stevens is at hq and has the details on this story. >> that's right. there's not just an arms race for chips, but also for the equipment that cools them. specifically liquid cooling. on nvidia's call ceo jensen huang said the number of data centers that want to go to liquid cooling is, quote, quite significant because traditional air conditioning systems just don't cut it for gen ai chips given how much heat they're generating. lick kid cooling can lower data center operating costs since it lowers power consumption. telling me we've crossed the rubicon in the sense there's no going back to traditional cooling. currently about 5% of data centers have liquid cooling but

the firm anticipating a 40% compound annual growth rate ahead. now right now there are no pure play liquid cooling companies, but there is a lot of interest given the potential market size. verdsit has the highest exposure with anven and snyder electric trick and then also the legacy hvac names. none have made a big splash in liquid cooling, but it's a natural extension of their business model and companies including trane and carrier have all indicated they arerd interested in a piece of the pie. >> you cover the energy markets. when it comes to data centers we're talking about power consumption, but the numbers are going to be enormous percentage wise in terms of how much power is going to be consumed by all these data centers. how important is this advancement in liquid cooling going to be in terms of reducing those overall consumption numbers. >> the power consumption with electricity prices on the rise is a huge cost and so anything

they can do to make their systems more efficient is going to lower their operating costs. so one of these liquid cooling systems can have a higher up front capex cost but does reduce the operating costs longer term. a lot of these big tech companies have net zero coalition. anything they can do to make the systems more efficient they will want to do that which is why we're also seeing momentum behind liquid cooling. >> that's an important point. the carbon neutral goals of some of the biggest companies in the world, they can't just rely on natural gas, certainly not coal as well, to power those data centers. thank you. pippa stevens. coming up, nec director brainard from the white house with the reaction to the pce inflation data. keep it here. hi, my name is damian clark. and if you have both medicare and medicaid, i have some really encouraging news that you'll definitely want to hear. depending on

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. good friday morning. welcome to another hour of "squawk on the street." i'm david faber with seema moody and wilfred frost live at post nine at the new york stock exchange. sara and carl have the morning off. let's give you a look at markets and treasury markets as well a half hour into the trade. trading day. and, of course, final day of august. you can see we are up. as for the 10-year yield hanging in around the 3.87 mark. >> here are three big movers that we are watching. starting with dell beating on the top and bottom line, server sales up 80% thanks to demand tied to artificial intelligence. we will break down the numbers later this hour. take a look at lululemon, shares losing its early steam flat right now cutting guidance after its first revenue miss in more than two years. shares have been nearly cut in half on the year. a similar story at ulta the

company missing revenue and earnings estimating cuts its outlook. >> consumer sentiment data crossing. let's get back to rick for the latest bout of data. >> this is the final read for august for university of michigan sentiment and the subindices. what's important here is, is that the mid-month reads get tossed and the new read 67.9 replaces 67. 8 that remains the best level since june of this year. if we a look at current conditions, 61.3 usurps 60.9. that remains -- both numbers remain the best since december rf -- excuse me, i'm sorry the best since july. july. if we look at 72.1, that's expectations, that equals exactly what the mid-month read was and that does remain the best since april of this year. now, the inflation reads,

probably the most important aspect today, we see 2.8 replacing 2.9 on the one-year outlook. that indeed is good news but does remain the comp going back to december of 2020, 2.9 or 2.8. it's been a while since we've seen those close to or above 3 levels. on the five to ten-year inflation outlook it remains at 3%, 3% well is the one, two, three, four, fifth consecutive month in a row that it's at 3% and i do want to point out that it has been lower. so this is the one fly in the ointment. we've had a 2.8 low in march of this year. even though it is slightly elevated pretty much from this level is moving sideways. david and the gang, back to you. have an enjoyable labor day weekend. >> and to you, rick. to you as well. thank you. the fed's favorite inflation gauge, pce, did rise 0.2% in

line with what had been expected. here with the first reaction from the white house is national economic council director lael brainard, good to have you with us this morning. give me your reaction. i guess let's start off there in terms of the number itself. as i said it was at least in line with what had been anticipated by the economists who follow this very closely. >> yes. i think we've now seen a string of monthly inflation reports that should give us confidence. inflation is running at 2.5%, and that is the lowest level since the spring of 2021 when you started to see that supply-related pandemic inflation surge, and that should give us confidence that the economy cancontinue expanding. we saw good numbers yesterday, and good numbers on consumers this morning. the economy can continue expanding. the labor market can continue -- it's solid, with inflation moving back to normal levels.

so that is a very reassuring print this morning and consistent with what we're seeing in the markets, which is that mortgage rates have come down. they've still got some distance to go, but mortgage rates have come down. market rates have come down. that's a good picture. of course still big affordability challenges that continue to be the focus of the president and the vice president in terms of continuing to lower costs for american consumers. >> interesting you went to mortgages, but you did mention saying the labor market is solid. after the last jobs report, of course, there were any number of investors at least, lael, questioning whether we were headed into a recession. now that's called, but i am curious as toing what your expectations are going into the next jobs report we will get in a week's time. >> yeah. so since that time we've seen jobless claims coming down and they're at quite modest levels, similar to what we saw earlier

prepandemic, and again, we've got a resilient consumer. several pieces of data suggest the consumer remains resilient. you know, real incomes have gone up, wages have risen faster than prices. more american households have money to spend and that should sustain the economy and it's good to see inflation coming back down to normal levels. again, though, the focus has to be on lowering costs. that continues to be a real pain point, particularly in areas like housing, health care, where the president and vice president are very focused. >> i wanted to -- you mentioned most households have more money, but i want to mention a couple lines from the dollar general earnings call yesterday. of course they're saying that most of their customers are earning around $35,000 or less annually and say the majority feel worse off financially than they were six months ago and also said, quote, more of our customers report they're resorting to using credit cards for basic household needs and

approximately 30% have at least one credit card that's been maxed out. what's your view on that? are you concerned about things turning on that lower end consumer price point? >> very worried about affordability, particularly for working families and middle-class families frankly. health care costs are just too high, and i think we've seen some progress with insulin costs that the president and vice president brought down to $35. that's a big benefit to many families that rely on insulin and other drug prices that we're seeing now being negotiated for medicare, for seniors, but let's face it, health care is a major burden for many american families and we're continuing to see that families find prices at the grocery store too high and that's why we are asking companies to pass on those savings to consumers.

the one bright spot i will say, gas prices have come down. they're about $3.35 nationally. below $3 in some states. that's a benefit a reduction of about 50 cents since last year, lowest driving costs going into labor day that we've seen in three years. so still need to make progress. >> there's been a big debate of late no doubt i'm sure you're well aware about the extent to which vice president harris should embrace the record of president biden. the administration said she's been a part of, as a deputy. when it comes to your grief on the economy, should she be loudly celebrating the economic achievements of this white house or hinting there at some of the issues in your last answer, given the inflation, given the way that that does affect everyone, does it make sense to distance herself a little bit? >> so i can't speak to the campaign, as you know. what i can do is say that nobody

is resting on any achievements. the president and the vice president are completely focused on continuing to work every day to deliver for middle-class americans, and so we are very focused on lowering costs. you know, we need to build 3 million more houses to start to bring housing costs down. we have a plan to do that. we're going to need some bipartisan support. it's unfortunate that senate republicans blocked the tax credits that would have resulted in a down payment of 200,000 affordable homes. look, every day i think the president, the vice president, are working to lower health care costs, lower housing costs, getting rid of junk fees and credit card fees, so no, everybody is focused on the work that is necessary to deliver for american middle-class families. >> wave been looking through the estimates of the august jobs report coming out one week from

now. how should we be modeling the impact of immigrants, legal or not, on the jobs growth and growing supply of workers in america? >> so as you know, those data are patchy, butting what we do is participation in the labor force, particularly among working aged people is the highest we've seen and that is true of american citizens and if you look at employment rates also true for american citizens, so what we're seeing is an expanding set of job opportunities and people that are responding to those job opportunities are in many cases by going back into the labor force. that's a positive for incomes and the overall economy. >> director brainard, thank you for joining us. appreciate it. >> thank you. august was, of course, a volatile month for the dow, s&p and nasdaq carving out gains with the dow and s&p hovering at fresh highs.

what will september bring to stocks as we get ready for a jobs report and fed rate cuts. joining us head of research and cnbc contributor tom lee. great to have you with us. nasdaq will only have gains if it continues its strong session today. so it won't be significant net gains. tom, great to see you. long time no speak. >> yeah. >> first and foremost, what's your reaction to how the market is processed nvidia's numbers? it, of course, fell initially in the premarket and yesterday morning it was doing all right and then it did close more meaningfully by the end of the session yesterday. >> well, i think nvidia is one of these stocks that has become part of like a stock market lure. almost everyone has a position. i don't think the results and the earnings changed anyone's minds about ai and the central -- playing in both global productivity but nvidia's role, but i think the selloff

tells you a lot of good news was priced in. i think that's why the stock fell. it didn't take the broader market down. i think that was kind of a positive outcome and i think it just shows you there's room for a lot of rotation and i think that it's revealing that small caps is one of the groups benefitting from that rotation. >> let's talk about that rotation, tom, and the extent to which there's still a long way to go if you're looking at the valuations of some of those sectors that haven't done so well in recent months and years or whether things have bounced enough across the board that you start to get a little bit concerned about valuations for the entire market, not just the nvidias of this world. >> valuations are definitely something our clients are asking us about because, you know, the equity markets have been rising for several years, but the idea of a rotation, i think is grounded on a couple of things. one is that the fed's rate path is lower and that benefits

cyclical stocks and small caps pup and we know there's also a lot of cash on the sidelines and investors derisk because of, you know, the yen crisis and just general concerns about the summer. so i think the nvidia results plus the fed in september is really the catalyst that it's going to get some investors to actually follow through with the rotation. i think we're early. small caps, people think they're expensive but the median p/e of a russell 2000 stock is still 10.7 times forward earnings. that's compared to almost 17 times for the s&p. the small caps have a lot of room for multiple expansion. >> but tom, do you want to own the index? i mean there's a lot of not great companies when you talk about small caps in terms of just not just their indebtedness but any number of other metrics you night want to use. are you telling people they should buy individual stocks or the index? >> i think it's both, david.

we have a lot of portfolio managers that focus on small caps and they're finding a lot of attractive individual ideas with earnings growth, but i think there is a misconception about the russell 2000. over 70% of the nonearners in the russell 2000 are biotech stocks and i don't think they're meant to generate earnings. if you look at russell 2000 earnings in aggregate it rose 18% of the quarter and it's projected to grow 39% in the third quarter. in aggregate it's not a bad index to own anyways. >> i want to get your thoughts on the broader economic data. pce came in line with expectations. we had gdp yesterday at 3% versus the 2.8% estimate. as we start to get ready for an interest rate cut, how much is already priced into this market? >> we'll never know how much good news is priced in, but i think there was a lot of encouragement in both of the data points you point out. you know the pce core came in at

0.16. the upside driver there was financial services, which is because the stock market is up. it's showing up as inflation in pce core. the year over year is staying at 2.5, 2.6, which means most are thinking it would tick up. negative revisions for the prior months. on the inflation side, you know, the -- a 2.8 for umich one year is prepandemic levels of inflation. consumers are always around 2.8, so i think this is giving the fed a lot more green light to cut and keep the labor market strong which means it's essentially acting as a fed put going forward. >> tom, stepping back you made some fantastic calls over the last couple years. i'm interested in your take as to why higher interest rates didn't derail market valuations in a more pronounced or prolonged way, and i guess linked to that is the extent to which now when rates come down again, will it benefit the market as much as maybe some

people are expecting? >> yes. i would -- i agree with you. i think most of us thought if the fed raises rates at the highest pace in history, we should have either had a heart attack in the economy and an economic recession plus a stock market crash. you know we did get a huge stock market correction, but we got a soft landing. i think parts of the economy did go into recession, wilfred. we know housing activity is recession level. the auto industry is essentially suffering recession when you look at delinquency rates on loans. i think there has been real negative consequences of high rates and it's stressing the low end consumer. i think the ceos are the ones that didn't get caught in this because the fed signaled they were going to raise rates dramatically. that meant no company did capex in the face of that. many companies cut inventory and raised a lot of cash.

i think businesses prevented us from having a recession because they got cautious. i think that's why when the fed starts to cut, there is going to be a positive impulse because, one, there's pent up capital spending. companies aren't over leveraged. there are going to be ipos. you talked about the dearth of it, that should come back. as you cut rates that's going to stimulate the consumer. >> tom, real quick, you mentioned the market multiple the s&p i should say at 17. are you expecting $330 of s&p earnings? because that's what that implies >> well, that's the median p/e, david. so when i look at median, i'm taking the 250th stock in the s&p and that's at 17 times. i think in aggregate the multiple is higher because the mag seven have a higher p/e. the median is a better way to look at market composition. i'm comparing that to the russell 2000 median, you know, the 1,000 stock in the russell.

>> i see. wanted to make sure i understood that. where are you on s&p earnings? do you have an estimate? >> we originally thought this -- that 2025 earnings at the start of this year would be 260. i think it's tracking closer to 280. so it's not that market is cheap on next year's earnings because that would be roughly 20 times, but i thinking if we think about market breadth expansion we want to think about the stocks outside of the mag seven and i think there's room for expansion. >> tom lee, thanks for joining us. >> as we head to a break a road map for the rest of the hour. apple and nvidia reportedly in talks to invest in openai. what will that mean for all those companies. plus, dell shares heading higher on the back of its latest results. what investors need to know. >> as we head into labor day a new list of the best companies to work for in america. who took the top spot.

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"the wall street journal" now reporting that apple, nvidia and mfts microsoft are looking to put money in which would lift openai's valuation to north of $100 billion. a source familiar with that deal telling me thrive capital will be leading this round in putting in a billion dollars as well. i am told by a source the round hasn't closed yet. someone i spoke to said it could be a couple weeks and the valuation is in flux but looking to be well north of $100 billion just behind spacex in terms of the most valuable private companies in the u.s. to put that number in context, this is bigger than the market cap for the companies we cover. about the size of shopify, roughly double what capital one-on-one's market cap is. i did speak to an investor looking to get in on this deal and tell me the process is not being run by a bank. it's openai's team shopping this out. they say openai needs to justify that with exponential growth and

a better large language model it's working on gpt 5. in order tojustify that number openai may be worth about half a trillion dollars in the next five years. that's how they're underwrig this deal right now. also signals this all-out arms race for the ai companies to get more cash, openai with chatgpt has been considered the leader, but it's going to require even larger dollars. this cash pile it's going to need more cash to stay ahead of rivals like anthropic. back to you. >> kate, i had a question. so many, but we don't have a lot of time for all of them. what do we think apple and nvidia want? do we have any ideas what they think they will gain given microsoft's significant position already? >> yeah. it's a great question, david. from what i'm hearing it's about having a seat at the table. microsoft has invested $13 billion. they are on the cap table at this point. you wouldn't scratch your head and say why now, why would

nvidia and apple want in. they want influence. they have this goal of agi and -- which is basically general intelligence, they want to have some sort of influence i'm told over the direction rf this entire industry. it's a large number amount to pay just for a seat at the table, but that's what i'm told is really behind this. >> kate, thank you. let's talk about what this could mean for apple, and its ai strategy. joining us is bofa securities analyst whamzi mowhan. for shareholders watching this openai fundraising round, what does it mean for them? how significant could it be if apple is involved in the investment round? >> good morning. thanks for having me. look, i think it's really interesting, apple actually makes a lot of investments in startups and technologies and really goes down the rabbit hole across the spectrum in areas it thinks can change the future. they do investments.

they did ride share. they invested in a lot of technology companies across the supply chain over the years to make sure that the direction of technology really fits apple's strategy long term and want to make sure they don't miss out on any large potential technology inflections. i think they go down the rabbit hole in the amount of r&d going down sort of every nugget of every technology innovation, whether it's battery or sensors or display, right. like they're there to make sure they don't get disrupted by someone else. so i think this is something to do with really knowing the direction of like where ai is going, where generative a.i. could go. wwdc announced a partnership with ai. it is material to them when they integrate with someone to understand where their technology strategy is going and this gives them a better seat at the table to understand and get an inside view of what is going on. >> in terms of the technology, does it signal to you that apple's newest phone and apple

intelligence will have deeper chatgpt technology on it? >> so it's a great question. look, i think that the way that apple views its integration with ai is really two fold. one is, what is the information on the device that it cares about with supporting the privacy, with giving you great recommendations, and all of this is going to be done within the apple ecosystem. everything that's done on the phone or in apple data centers. that's basically their private cloud offering does not leave and go outside on any other servers at all. when you ask something which is much broader in scope, right, like it doesn't have to do with your data, it's not about your calendar and your e-mail and schedule but a generic question about something that's happening in the world, then they want to use these third-party services. that integration is going to happen with multiple providers over time. the fact that they're choosing openai because they're kind of the lead right now in sort of as they have quoted right like the best in class at the moment, doesn't mean that they wouldn't

change and use integration with many other partners over time. so i think that there will be a deep integration with multiple providers over time, just to give users the best possible experience and choices but generally speaking, like i think the value that apple intelligence specifically is going to bring to the table is going to be much more around experience that comes from all the information that's stored on the device and can help users get better recommendations. >> does it worry you that apple is not doing this type of thing themselves? i mean, innovation has been critical to them for so many reasons, not least their margins, and we're probably at a moment in time, much like at the start of the success when ios was key to the adoption, but we're probably at a moment in time where the hardware isn't a differentiator and this sort of new software application will be. could it hurt their margins if they have to sort of outsource this stuff? >> well, i would look at it differently. i would actually say that across

all the players who are investing in ai, right, the amount of capital investment that they're throwing in like, you know, tens of billions of dollars a quarter, you know, maybe 30, 40, $50 billion annually relative to apple's capex, it's a different strategy. it's a question of focus. what are you focusing and what are you good at and what apple is good at is devices and distribution of those devices and distribution of technologies that can run on those devices. apple is happy to be where it is. i don't think that they're going to go and chase down this, you know, very deep sort of capex investments super capital intensive where everyone is questioning what is the roi ultimately from these, whereas apple can sit back and say, i don't care who actually succeeds in bringing agi to the table. i will have a partnership with them. i will get that technology ultimately into customers' hands. i think it's a different strategy the way apple looks at it in terms of monetizing

generative ai. >> why isn't it what they did with search, competition to be the default provider of their service on the iphone google paid $20 billion a year to do that for search? >> absolutely. i think that you can look at generative ai as very similar to the search market, right, like apple didn't invest the billions of dollars it took to develop a search engine. they have really monetized it excellently by giving their install base access to google search and they're getting paid $20 billion to do that. i think generative ai in some ways is a similar thing. it's what's not clear yet the generative ai monetization model, which became very clear and apple was able to take advantage of that, we don't yet know what generative ai model will be. what's clear is that the direction or the flow of funds is still going to be from these

generative ai partners going into apple for giving access to its distribution. >> maybe we'll get more details september 9th. nor now thanks for joining us. >> after the break the labor day travel rush is on. a close up look at how ai could shake up the airline industry. don't go anywhere.

welcome back to "squawk on the street." i'm silvana henao with your cnbc news update. tragic news from the nhl. columbus blue jackets star johnny gudro was killed along with his younger brother while they were out on a bike ride. new jersey state police say they were struck by a suspected drunk driver. the brothers were in their hometown of carney point where they were scheduled to be groomsmen in their sister's wedding this weekend. defense secretary lloyd austin has approved a request to provide the secret service with additional military support for presidential and vice presidential candidates for the upcoming election. a pentagon spokesperson declined to give details on the support. google is reportedly working on ai technology that can hear

signs of sickness. bloomberg reports google has trained its ai model with 300 million pieces of audio that includes coughing, sniffles and heavier breathing to predict early signs of diseases such as tuberculosis and teamed up with an indian start-up to put that tech in smartphones where it could potentially help high risk applications in areas with poor access to health care. david? >> thanks. interesting. we are watching shares of dell headed higher doubling over the last year. we will be back in just one moment.

. the tsa expecting to screen a record 17 million passengers this labor day weekend with today being the busiest day. one key do managing that strength, ai. for her latest installment of the impact of ai, our julia boorstin has that story. >> the airline industry is

betting that ai can help it reach new heights. major u.s. airlines including american, united and alaska airlines are investing in new ai tools to help speed up and streamline everything from ground controlling to customer service, to route optimization. american airlines took us inside its dallas-fort worth control center to show us its ai powered smart gating tool in action. the technology developed in-house uses ai and machine learning to automatically assign gates to incoming flights cutting down on runway taxi time. >> the sooner the plane gets to the gate our passengers have more time to connect, our bags have more time to connect, our flight crews have more time to connect. >> reporter: american said the tool has cut taxiing time by about 20% or two minutes per flight, which adds up to about 17 hours daily across the five airports where it has been rolled out. >> 60% of the customer traffic

is making connections. this is a really big deal. so trying to do that manually used to take us hours. now with smart gating we reduce all that to less than a few minutes. >> reporter: alaska airlines is using what it calls waze for the skies. the tool deploys ai to improve efficiency in flight paths and helps design the fastest routes which saves fuel and minimizes delays and has video cameras to use ai to analyze when catering fuel and baggage trucks arrive and depart which alerts agents about time and delays. cutting down on aircraft turnaround at gates. >> the use of ai and improved technology will enable them rather than massive layoffs, we're assuming we'll see fewer h hires through attrition and be able to do more flying with fewer people. >> united uses generative ai not to prevent delays but communicate them since consumers are less upset about delays when

they understand the source. the airlines' customer service department uses generative ai to craft what they say are detailed and empathetic messages during flight disruptions and united has used the tool on 6,000 flights since march and says since then its surveys have found a 4% increase in customer satisfaction. the companies tell us these tools are not replacing any jobs, at least not yet, but these tools come after a slew of industry-wide layoffs. what theairlines say is these tools can drive efficiency in a way workers haven't been able to do yet on their own. guys? >> julia, from your conversations, did you get a sense of whether ai could help the airlines avoid the computer system outages it's been vulnerable to in the past? >> what's interesting about those outages those were not tied directly to what was going on about internal software. that was about their reliance on external software systems and those outages just show sort of

how interconnected all of these platform are. but there are a number of tools that are using ai to try to monitor for things like hacks or cyber security issues to try to prevent those outages. when it comes to airlines even just a minute or two of more efficiency that could have ripple effects down the line and major impacts on customer satisfaction. all tools are being deployed right now to try to keep the planes running on time. >> julia, great stuff. thanks so much. julia boorstin for us in l.a. still to come the fed's preferred inflation gauge pce comes in line with expectations. whatill wit mean for the fed's rate cut calculations. we'll discuss next.

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cnbc's partner just capital out with new rankings when it comes to the top companies for workers. let's get over to brandon who has details for us. >> david, good morning. an interesting one on the labor front. just capital looked at how russell 2000 companies performed on key issues american workers say matter most. issues like paying a fair and living wage and parental leave benefits. here are just capitals top ten companies for workers. banks and semiconductor companies being the most prevalent. bank of america and citi and nvidia the top three names on the list. jpmorgan, amd, micron rounding out the names there. these companies all offer a range of benefits, longer paid parental leave for primary and secondary caregivers, many disclose an hourly minimum wage with pay on average higher than their peers. of note many companies disclose workforce by gender and race something less than half of russell 1,000 companies do.

they conduct internal audits to close the gender and racial pay gap. we've seen recently a handful of companies pulling back on these types of dei practices. lowe's, ford, the latest to announce changes. the very policies that lead just capital's of top employers. david, you have to wonder will companies continue to prioritize these key issues that matter to american workers or more begin to reassess important consideration as we consider to discuss the labor market here at cnbc. david? >> brandon, i wonder, the extent to which those key factors that you allude to are what people prioritize or whether there's one that trumps them all, which is pay. it's interesting, some of those big banks top the list because they've always been quite far ahead of the curve in boosting their minimum, their internal minimum wage quite well ahead of the marketplace. >> yeah. >> i imagine pay is a big, big factor. >> the annual rankings of the

just 100 remains to be the number one issue is paying a fair and living wage to workers. as you point out that's the reason why financials tend to lead. they do not only offer the highest minimum wage but disclose offering that. jpmorgan, like citi, who have a starting salary or annual or i'm sorry hourly rate of about $24 an hour. that is really why they're sort of rounding out this list because of that number one issue as you point out. >> i see a lot of semiconductors at the top of the list. what do you think is behind that? just pay or something more to it? >> i think it's pay, but the companies have a lot of resources and capital to invest in these programs. these bit of packages come at the expense of the company. why when companies are trying to improve their bottom line sometimes they turn to layoffs of their workforce in order to improve the fundamentals. it costs money to offer these numbers of weeks. 24 weeks, some companies like nvidia offer for paid leave for primary parents.

so again, it's, perhaps, the fact that these companies have the means in order to provide for their employees in this way. >> money matters. great story. thank you. brandon gomez. we are seeing the chip makers up today. coming up on the show the view from the c-suite when it comes to software demand. the ceos of autodesk and mongodb as both names gain on fresh numbers. don't go away. you founded your kayak company because you love the ocean- not spreadsheets. you need to hire. i need indeed. indeed you do. indeed instant match instantly delivers quality candidates

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traders cutting 25 basis points in september, 100 by year end. joining us to discuss former dallas president richard fisher, senior adviser at jeffries and -- >> and a friend of yours, i haven't seen you in a while. >> we saw each other last time i was back. we manage to sync up, which is good news. did you think 25 basis points or do you think 50? >> well, right now i would say 25 is most likely outcome. we'll see what the employment numbers are like before the meeting. we've yet to see that shoe drop. and inflation numbers are proceeding. i thought powell was circumspect in his comments, although he indicated clearly where they want to go. i'm talking about his comments out of jackson hole.

and we'll just have to see. >> do you think we'll get the 100 by year end or somewhat similar to the start of the year? do you think the market has got a bit ahead of itself in terps of pricing in the total number of cuts? >> i think the market is always going to get ahead of itself. there's a lot of wishful thinking here. again, the market and -- has been forecasting rate cuts going back to the original idea of possibly six cuts this year. now you've got, of course, recession, recession, recession. we've been talking about it forever. it's not happening. it's happened in the manufacturing sector, no question. so we'll just have to wait and see. but i think the fed has to be careful not to indicate any kind of sense of urgency or panic. and they have to continue on their deliberate course, which is what powell has been very good at, particularly since they recovered from their -- so, i

like to say, transitory argument. so, i think a quarter point cut would be a good start. then we'll just have to see what the data shows us from there. >> given that it is -- i was just going to ask, given it is an election year, do you think that indirectly affects how jerome powell is thinking about rate cuts, the size, maybe taking a more conservative approach, if at all? >> no. i sat at that table for ten years, under three different chairmen, starting with alan greenspan. jay powell sat to my right. i got to know him very, very well. politics just does not enter the discussion. and i know we keep saying that over and over again. i think more than any recent chairman, particularly powell is hell-bent on making it clear, and he's done it over and over again in his comments. that's something that's not going to give them a direction one way or another. they'll do what's right. look, the big issue here in

terms of rates and on the yield curve, short term clearly the fed has the greatest influence. no question. but my biggest concern here is what's happening with the increase in government debt financing. i mean, we're -- interest cost, cost security we're running a billion dollars a day, now they're running $2 billion a day. as rates have come up and some 22% of the outstanding debt is now in t-bills. those are being rolled over at a rate close to 5%. that's up from 2% previously. this, to me, is the biggest concern that i have right now. it's not so much the fed. i feel comfortable with them. >> yeah. >> the question is, what's going to happen with the cost of carry? what's going to happen with the growing volume of treasury auctions? are we running a risk with china reducing their holding in the fed, even though they're selling

off -- or letting roll off the remainder of their balance sheet from that large size that they collected. who's going to buy the stuff and at what price? and do we run the risk, as can did some years ago, of having a failed auction? that will determine the key interest rate, which is the ten-year and the sevens and so on. >> yeah, but that -- richard, it's david. that will be a bad day if it happens. i mean, it hasn't yet. and then we'll have plenty to talk about, but, listen, we are in an election, to seema's point, coming up. morton just did a nonpartisan look at both candidate's plans. i think trump's plan would add as much as $4 trillion, still including economic growth over ten years. harris is below that at about $1.2 trillion. nobody talking significantly about deficit reduction at this point in a meaningful way, are they? >> they're not. and their projection right now to be more than $1 trillion

every year for the next ten years at least. so what my -- again, i -- i'm a central banker by trade. and i stay away from politics. but if you look at the economics of both sides here, there's no discussion on how you reduce the rate of growth, deficit expansion, and how you're going to deal with the burden of the cost of carry from the u.s. government, which now exceeds that which we spend on our military in a very difficult time and challenging time. so, i appreciate the word study. they don't seem to want to talk about it, these two candidates. and they're going to have to address this if they get into office because it's a serious matter. having said that, it's the congress that determines the budget. and the ways and means committee has also been negligent under either administration in trying to rein this in. that's where you decide who you tax, what you tax and where you

spend. >> richard, we have to leave it there, sadly. great to see you. thanks for joining us. >> well, have a great labor day weekend and have a happier topic next time we talk. >> we will, indeed. great to see you. form dallas fed president richard fisher. by the way, the markets, before we close out this hour, slipping a little bit. still higher across all three of the major averages. 0.7%. the nasdaq, the leader. dell's pared back some of its gains. >> it is. taking a look at nvidia, which we really didn't discuss, obviously, after the fall yesterday on those earnings that were in many ways certainly better than any of the estimates out there, but perhaps fell short of the most optimistic investors' hopes and dreams. nonetheless, stock is coming back today a bit, seema. >> nvidia is a customer of dell's. they use their a.i. servers. these were really strong reports. it really is interesting to see how dell is making this strong pivot towards a.i. servers because pc demand is still sluggish. they're saying, let's make this pivot, rear seeing strong

demand, enterprise customer demand is up, as they said on the call, and some bullish remarks from wall street so far. b of a, morgan stanley raising their price on the stock. quick programming note. be sure to watch -- we have a big interview. it's next week, but you want to start preparing for it now. you want to get your chair ready, your popcorn. olympic gold medalist, four-time nba champion steph curry will join us, tuesday morning, 10:30 a.m., eastern. sadly, i won't be here but sara will. ntue ive market coverage coins. have a great long weekend, everybody. . amelia, weather. 70 degrees and sunny today. amelia, unlock the door. i'm afraid i can't do that, jen. ♪ (suspenseful music) ♪ why not? did you forget something? ♪ (suspenseful music) ♪ my protein shake. the future isn't scary. not investing in it is. you're so dramatic amelia. bye jen. nasdaq-100 innovators. one etf. before investing, carefully read and consider

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with seema mody. we're live from the floor of the new york stock exchange. stocks continue their march high other the back of fresh inflation data. the dow coming off 25th record close of the year. how far can stocks bounce from the early august lows? >> and then building the next nvidia rival. the former president of softbank on how he's thinking of alternative a.i. names. two tech names helping to lead the nasdaq